Apple to set up first technology development centre outside the US in Hyderabad

Apple’s centre will occupy 250,000 square feet in Tishman Speyer’s WaveRock facility in the city’s IT corridor and is set to start in the latter half of this year.Gulveen Aulakh | ET Bureau | February 16, 2016, 14:00 IST

The rising importance of India as a market for Apple marks a sea change from a couple of years ago.NEW DELHI: Apple will build its first technology development centre outside the US in Hyderabad with an investment of $25 million (Rs 170 crore), likely employing about 4,500 people, a senior Telangana state government official said.

Apple’s centre will occupy 250,000 square feet in Tishman Speyer’s WaveRock facility in the city’s IT corridor and is set to start in the latter half of this year.

"This is correct. MoU will be signed after some approvals come," Jayesh Ranjan, IT secretary of Telangana, told ETwhile confirming the details of Apple’s investment. "They’re (Apple) waiting for the SEZ approval (for the area) to come, which is expected to be given in a couple of days."

Apple, based in Cupertino, California, did not respond to queries seeking confirmation. The company has been in talks with real estate firm Tishman Speyer for a longterm lease of about 250,000 sqft, ET reported last month, citing people familiar with the matter.

Apple follows Google and Microsoft, which have said they will invest in the state. Google plans to open South Asia’s biggest campus and its only facility outside the US in Hyderabad in the next few years chief executive officer Sundar Pichai announced in December. Microsoft also plans to expand operations in the state.

The rising importance of India as a market for Apple marks a sea change from a couple of years ago.

The US smartphone maker’s move comes on the heels of applying for a single-brand retail licence that will enable it to open its stores in India.

The government has eased foreign investment rules for singlebrand retailing and relaxed local procurement conditions for hightech companies. At present, Apple sells iPhones, iPads, Macs and other products through third-party resellers.

India is the world’s fastest-growing smartphone market, having surpassed the US in 2015, making a strong case for Apple to set up stores in the country and reap the benefits of a large software development resource pool.

The South Asian nation is becoming an important market for Apple, where its iPhones have immense brand recall and massive aspirational value, especially among the youth. Apple CEO Tim Cook recognised the growth potential in the country after the company’s India revenue growth surpassed that of developed markets.

Revenue in India surged 38 per cent in the October-December period, exceeding the 11 per cent growth in overall emerging markets and 14 per cent in Greater China, Apple’s second-largest market after the US.

Apple’s iPhone sales volumes grew 76 per cent in India compared with 45 per cent in Korea, the Middle East and Africa, 20 per cent in several western European countries and 18 per cent in mainland China in the quarter.

The company posted its best quarterly sales in India with volumes crossing 800,000 units in the three months ended December, when sales in developed markets faltered.

"During hard times like now, it provides an opportunity to invest in newer markets such as India where there are long-term prospects," Cook said.